By Senad Karaahmetovic

Rob Sanderson, a Loop Capital analyst reiterated his Buy rating for Amazon stock (NASDAQ:) amid recent selling.

To reflect the lower multiple in the retail industry, an analyst lowered the price target to $2.825.00 per shares. Shares have fallen nearly 35% over the past year.

Sanderson urges investors to “ look for buying opportunities in stalwarts with defensible moats and well-managed innovators that will emerge stronger.” Amazon fits this description.

“We misjudged the magnitude of inflationary pressure and excess capacity in the near-term but continue to think that unit economics will return to historic levels over time. In this note we present a framework for evaluating earnings power as unit economics recover,” Sanderson told clients in a note.

Analysts see the possibility that share prices could increase if the unit economy can rise as Sanderson expected. This is based on future earnings.

“With what we consider reasonably conservative assumptions for improvement on unit economics, our framework points to retail operating margin of +7.5% by 2025 with about $40B in segment net profit. In this scenario, a 20x forward P/E on retail profits with 30x for AWS and Amazon could be a +$4,000 stock on recovery,” the analyst concluded.